If the T-Mobile and Sprint merger is allowed to proceed, Dish Network has plans to become a fourth major wireless provider in the United States. Dish Chairman Charlie Ergen in December committed to deploying 10,000 sites by the end of 2022 as the company builds out a nationwide network to compete with the national carriers.
Dish also announced that it would acquire “Boost Mobile, Virgin Mobile and the Sprint-branded prepaid service.” However, Sprint Forward no longer exists, and Sprint is in the process of transitioning its diminishing Virgin Mobile base to Boost Mobile. But let’s set that aside for now. And let’s assume that Dish has coverage of 70% of the U.S. population by June 2023, as announced in July 2019. Let’s also assume that Dish quickly builds a nationwide network that is competitive with the nationwide networks that Verizon, AT&T and T-Mobile have built in recent decades.
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What is Dish's strategy for retail sales of its wireless plans and for phone sales? The company hasn't talked about this. But it will be entering a competitive landscape that's well established. And it will need a retail strategy that doesn't ignore urban areas.
The current number four carrier, Sprint, has painstakingly built a major retail and advertising presence over the past quarter century. Sprint has nearly 4,000 stores. A slight majority are corporate stores, and there are more than 1,800 stores operated by Sprint dealers. Sprint is sold at Walmart, Best Buy, Sam’s Club, and at some Costco stores.
It has taken Sprint decades to develop this thorough retail presence and to build a brand that has a reputation of providing value for the dollar. Thousands of veteran Sprint reps are schooled in the art of selling phones, tablets, car trackers, smartwatches, and many other devices along with their accompanying plans, device protection offerings, and accessories. Hundreds of veteran account managers support these 4,000 stores and thousands of national retailers, putting millions of miles on their cars every year.
People have forgotten this, but Sprint has a global fiber network, a full suite of wireline and wireless enterprise connectivity solutions, and admirable IoT capabilities. Sprint acquired Nextel in 2006 and still sells push-to-talk and services for a large number of blue-collar companies that need ruggedized phones and business solutions.
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Another retail challenge for Dish will be integrating Boost Mobile. Boost has more stores than Sprint. Boost store locations are not generally compatible with postpaid Sprint sales, but the brand has tremendous appeal in urban America and unarguably, Boost provides great value to people who need affordable wireless service. The brand launched in the U.S. in 2001, in collaboration with Nextel and the brand has a powerful presence in urban areas.
Wireless is a scale game
Most regional carriers have been absorbed by national carriers, giving these national carriers scale when it comes to phone pricing with OEMs. There are already 421.7 million devices on carrier networks, including 284.7 million smartphones, according to the CTIA. Dish will start out small in comparison. It will have Boost and Dish's own base of 12 million subscribers for cross-sales of video and wireless services.
Finally, there’s timing. Xfinity Mobile, Spectrum Mobile and Altice Mobile have all launched and all have competitive pricing and deep pockets.
In my view, if Dish enters the wireless fray, the company will need to develop a concerted retail strategy. Hundreds of stores will be needed, eventually thousands. It may have an opportunity with national retail. Costco aside, T-Mobile postpaid is not sold at national retail. And Dish could fill the possible void from Sprint’s exit from national retail. The July press release did state that Dish has an “option to acquire certain … retail assets,” but specifics are lacking.
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Boost has thousands of stores, including mall stores and kiosks. These could be leveraged to some extent, although most stores are in areas that are not appropriate for postpaid sales. Boost dealers could also be incentIvized to open Dish stores.
But Dish will be coping with a stronger T-Mobile when/if T-Mobile buys Sprint. Sprint has more than 1,800 dealer stores in place, operated by dozens of deeply experienced retailers. There are 2,000 corporate stores as well. Leases are in place, and the personnel are in place. Sprint has recently stepped up its sales at Walmart and the carrier continues to sell via Best Buy, Sam’s Club and Costco. If Dish were to succeed in wireless – and I am not optimistic – this retail and national retail presence will be crucial.
I’d suggest that Dish set up a presence in Overland Park, Kansas. The acquisition of Sprint will lead to layoffs and former Sprint employees would be worth their weight in gold to Dish.
The cable companies have already blazed a trail toward new retail. As noted in the recent Wave7 Door Report, the cable companies have launched hundreds of stores that sell a combination of wireline and wireless. This seems to be working, as Xfinity Mobile had a record 261,000 adds in 4Q 2019.
Launching a national carrier will be an uphill battle, but a concerted retail strategy would give Dish its best chance to compete.
Jeff Moore is Principal of Wave 7 Research, a wireless research firm that covers U.S. postpaid, prepaid, and smartphone competition. Jeff has 25 years of telecom industry experience, including 13 years of competitive intelligence work for Sprint. Follow him on Twitter @wave7jeff.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.